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Resolutions & Amendments

30th International Convention - Las Vegas, NV (1992)

Government and the Economy in the 1990s

Resolution No. 129
30th International Convention
June 15-19, 1992
Las Vegas, NV


The hollow policies of the Reagan/Bush administrations created the appearance of economic prosperity during the 1980s. This false prosperity was lop-sided, with a favored few on Wall Street growing fabulously rich, while most working Americans barely progressed, or actually lost ground. The bubble has now burst in the 1990s, creating recession, countless bankruptcies, a banking crisis, and swelled the unemployment ranks. Yet the Bush administration pursues misguided policies that promise only more trouble for working Americans while bailing out the rich; and


Misguided national spending priorities hamstring economic opportunity for average Americans. Under the name of fighting Soviet expansionism, the federal government spent beyond its means on an unprecedented defense build-up, while crowding out domestic programs. This led to a $3 trillion national debt. The Soviet threat now has vanished and we face a new international order. But under the name of fighting the budget deficit, the Bush administration promotes more domestic cuts, ignoring the victims of the recession and the backlog of unmet social needs. Federal cuts for domestic social and economic development programs during the FY 82-FY 88 period averaged $642 for every man, woman and child in the United States. In his FY 93 budget, President Bush proposed cutting by $1.5 billion the level needed to keep low-income programs such as nutrition, child care, and job training, on pace with inflation; and


Misguided federal policy also means that more than half the states face serious budget deficits, which retards economic opportunities that states provide for average Americans. The recession has undermined state revenue sources. The absence of federal health policy has led to spiraling state health care costs and federal mandates have further strained state and local budgets. In addition, the federal government continues to retrench direct aid to states and cities.

This fiscal plight creates its own economic drag, as highly qualified and experienced public workers are furloughed or laid off. This further swells the unemployment rolls, reduces the state and federal income tax base, reduces the state sales tax base, and heightens the crisis of consumer confidence; and


Many state and local lawmakers have responded with their own misguided responses to the fiscal crises. In too many cases, these state and local 1awmakers have also turned their backs on average Americans by reducing services, cutting into education budgets, and cutting back on worthy economic development programs. Rather than restore some of the hefty tax cuts given to businesses and the wealthy over the last decade, state and local lawmakers are cutting spending and only beginning to see that there is "no free lunch;" and


Working Americans cannot afford to wait until federal and state budget deficits are "solved." Lagging public investments in physical infrastructure and human capital have already impeded private sector productivity, growth and competitiveness. Nearly one-third of large companies must furnish costly remedial education in basic reading, writing and math to have a competent workforce because of cuts in public education. The quality of America's bridges and highways is barely adequate to fulfill current requirements, and insufficient to meet the demands of future economic growth.

Sustained economic growth and full employment with price stability remain the appropriate goals for federal economic policy. Private investment cannot take place without public investment leading the way. Budget deficit reduction alone cannot cure the country's economic and social problems. Budget deficit reduction by itself would only make matters worse since it would absorb revenues that could otherwise be spent on domestic needs; and


Dramatic events of the last two years have refashioned world politics, eliminating the need for further U.S. military expansion, and creating a "peace dividend." This dividend would be best spent by expanding the domestic programs that are ingredients for sustained economic growth for working Americans; and


Additional revenue to address domestic needs as well as resolve the budget deficit can be raised through progressive tax policy. Progressive tax policy can also redress inequitable income opportunity.


As the United States enjoys brighter international relations, national priorities should be fundamentally restructured. The federal government must take a more active role in many areas, pursuing the goal of sustained economic growth and full employment, with price stability, both in direct spending and through increased aid to states in a manner that spreads the benefits of that growth to all segments of the population.